Nigerian Scam Targets Lawyers

April 10, 2012

By Angie Moreschi:

Okay, this might have a bit of a Karma feel to it, but you’ve still got to wonder, how exactly do people keep falling for the Nigerian “pigeon drop” scam. That’s where you are contacted and told you can get a much bigger pay-out, but first, you just have to send some of your money to make the transaction possible. Right, good luck with that.

This time, attorneys, who you might think would know better, became the target, and, yes, many fell for it. Among them, the Minneapolis law firm of Milavetz, Gallop & Millavetz (MGM). The Minneapolis StarTribune reports MGM became a victim after receiving an email from someone claiming to be a Korean woman who needed help in securing a $400,000 legal settlement for an injury in their area.

As it turns out, MGM was not alone. The government had begun a secret investigation of Nigerian collection scams that target U.S. attorneys. A Nigerian man and a Canadian resident were indicted in the case, but much of it remains under seal. Still, the government says the two were part of an international conspiracy targeting lawyers and law firms, which nailed 80 victims to the tune of at least $32 million. In all, there were some 300 known targets, with attempts to steal more than $100 million.

Scamming law firms

So, how do highly educated, skeptical attorneys fall for this? According to the federal indictment in Pennsylvania, it went down like this: A co-conspirator contacts a law firm, usually by e-mail, seeking help to collect a legal settlement or payments from a divorce or real estate transaction. Another co-conspirator poses as a representative of the party who owes the money and then delivers a counterfeit check. After the check supposedly clears, the money is wired to a bank, usually in Asia, from which it disappears. Click here to read the full story in the Minneapolis StarTribune.

Law Firm Blames its Bank

Of course, we’re talking about lawyers being ripped off here, so while the money has disappeared, they believe someone needs to pay. In the case of MGM, the law firm is going after the bank, which frankly continues the whole karma thing.

Robert Milavetz of MGM says its bank, Wells Fargo, is at fault and should pay them back. The firm deposited the fake check from the Nigerian scammers in its Wells Fargo account. Then, in an effort to perform due diligence called the bank to make sure the check had cleared. Bank employees apparently told the firm that “yes” indeed the check had cleared. Of course, it had not. So, when the firm wired the money to Asia, their “client” disappeared with the loot. If we learned anything from the mortgage meltdown, it was to be careful about trusting what your bank tells you… but we digress.

In the end, Milavetz is going after Wells Fargo alleging the bank knowingly engaged in a transaction that involved criminal activity or was knowingly blind to the facts and law. The firm is seeking $396,500 from the bank. Wells Fargo issued a brief statement on the lawsuit saying, “We believe the allegations have no merit. We will vigorously defend, and expect to prevail.”

Whistleblower Connection

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If you have specific evidence a company is defrauding the government, contact the James Hoyer Law Firm. As a whistleblower, you can file a legal action in the government’s name to recover money for taxpayers.